Nenagh Childcare Centre caters for more than 100 children and provides significant employment.
The charges to parents are fixed due to core funding regulations with no increase in fees in the 20 years they have been open.
According to Deputy Alan Kelly they are also not allowed to charge optional extras to fund food, equipment and materials.
He says something has to be done to enable the Nenagh Childcare Centre to continue operating into the future.
“Nenagh Childcare Committee came to me recently and said that they have a massive funding deficit and they will have to close by Christmas. They provide a service for 107 children and have over 20 staff. This would be unacceptable in the extreme.
“As a result following on from representations from the chairperson of the committee I raised the this issue in the Public Accounts Committee with the Department of Children. They fund Nenagh Childcare committee through Pobal and they also get some funding from the Department of Social Protection.
“As a result of me raising this the officials from the Department of Children under Roderic O’Gorman have agreed in the coming weeks to meet with me and the Nenagh Childcare Committee. I hope this is fruitful and will get to the bottom of the funding issues so this fantastic service that serves the people of Nenagh will continue into the future.”